JN Fund Managers’ Daily Market Update -February 3, 2020
United States’ (US) Rebounds in January 2020
Activity in the United States (US) manufacturing sector rebounded in January 2020 after contracting for five consecutive months between August and November 2019. According to the Institute for Supply Management (ISM), manufacturing activity had a reading of 50.9 in January, the highest level since July 2019, and up from 47.8 in December 2019. A reading above 50 indicates a growing manufacturing sector, while a reading below 50 indicates a contraction in the manufacturing sector. Of the eighteen (18) manufacturing in-dustries, eight (8) reported growth while eight (8) industries reported a contraction and two (2) remained the same.
It is likely that the improvement recorded in US manufacturing activity was largely a result of the easing trade tensions between the US and China. However, considering the global health emergency, due to the outbreak of the coronavirus, it is likely that supply chains globally will be disrupted and result in a slowdown in the global manufacturing sec-tor in the near to medium term.